Osborne v. Burke

The plaintiffs appeal from decrees sustaining a demurrer to and dismissing their bill in equity seeking an accounting from the defendant, the second mortgagee of a parcel of land who was also the purchaser of the parcel at the foreclosure sale held under the first mortgage. Additional relief sought by the plaintiffs is to restrain further prosecution of supplementary process proceedings instituted by the defendant based on a judgment obtained by the latter against the plaintiffs for failure to pay the note secured by the second mortgage. They also seek to enjoin prosecution of another action at law brought in another court by the defendant against them on the aforesaid judgment. The plaintiffs do not allege or rely upon any irregularity or invalidity in the conduct of the first mortgage foreclosure sale. Their sole contention is that, since the defendant in reselling the property made a profit in an amount larger than the outstanding balance owed to him on the second mortgage note, he should have no right to collect on that note. This contention is without merit. As a result of the first mortgage foreclosure the second mortgage lien was extinguished but not the second mortgage debt. Purdie v. Roche, 304 Mass. 647, 650 (1939). The defendant thereupon lost his security but was still entitled to payment by the makers of the mortgage note in satisfaction of their indebtedness to him. Purdie v. Roche, supra, and cases cited. The plaintiffs have set forth no cause of action. Interlocutory and final decrees affirmed.